Asian markets muted after Obama win

NOT UNEXPECTED:：Investors have factored in an Obama victory and are hopeful that his re-election would ensure a continuity of US monetary policy, analysts said

AFP, HONG KONG and LONDON

Thu, Nov 08, 2012 - Page 15

The US dollar slipped in Asian trade yesterday, while equity markets were muted after US President Barack Obama won a second term in a closely fought US presidential election.

The US currency fell against the euro and yen in afternoon trade, as dealers bet that under Obama, the US Federal Reserve would continue the loose monetary policy that has seen it flood markets with billions of US dollars.

The euro bought US$1.2860 in Tokyo, well up from US$1.2788 earlier yesterday and US$1.2814 in New York late on Tuesday. The greenback was at ￥80.20, compared with ￥80.34 in New York.

The euro bought ￥103.13, from ￥102.96 in New York.

The greenback was also broadly lower against other Asia-Pacific currencies: It fell to US$1.0466 from US$1.0432 against the Australian dollar, dropped to 1,084.60 South Korean won from 1,091.20 won, and slid to S$1.2209 from S$1.2240 against the Singaporean dollar.

Gold prices rose thanks to the weaker US dollar, rising to US$1,722.40 by 8:35am GMT, from US$1,679.75 late on Monday.

A clear victory had been the overriding hope, allowing the government to work to avert the “fiscal cliff,” which will dominate discussions in the US Congress between now and Christmas.

If Congress fails to agree how to cut spending over the medium term, there will be automatic deep spending cuts that could tip the US back into recession, in a major blow for the slowing global economy.

On equity markets, Sydney gained 0.71 percent, or 31.7 points, to end at 4,516.5. Tokyo was flat, nudging down 2.26 points to 8,972.89, while Seoul closed up 0.49 percent, or 9.38 points, at 1,937.55.

However, regional traders were still concerned about Europe’s debt woes after data on Tuesday showed a bigger-than-expected slump in factory orders in Germany, the eurozone’s biggest economy.

Berlin said industrial orders declined 3.3 percent in September from August after falling 0.8 percent the previous month.

That is much steeper than expected. Analysts polled by Dow Jones had been expecting a fall of 0.5 percent.

Greek lawmakers are due to vote later in the day on a new set of austerity measures — including tax hikes and pension cuts — that are needed to unlock the latest batch of international aid and stave off bankruptcy.

Eyes are also on the 18th congress of the Chinese Communist Party that begins today and which will see the country’s leaders for the next 10 years anointed.